PG&E reports $3.36 billion loss for 2000

By the OGJ Online Staff

HOUSTON, Apr. 17, 2001—Reflecting the turmoil in the California electricity markets, PG&E Corp. Monday reported a 2000 net loss of $3.36 billion, the result of an aftertax charge of $4.1 billion related to costs from the state energy crisis.

The California utility holding company reported a net loss of $73 million in 1999, reflecting losses from discontinued operations. Revenue in 2000 rose to $26.23 billion, a 26% increase over the $20.82 billion reported in 1999.

Pacific Gas & Electric Co., the utility unit of PG&E, filed for bankruptcy protection Apr. 6 in a San Francisco federal court. Neither PG&E Corp. nor any of its other units were affected by Chapter 11 bankruptcy protection filing.

The utility unit accrued billions of dollars in wholesale power costs that it could not pass on to customers under a state freeze on retail rates. Most power suppliers have yet to be paid. Pacific Gas & Electric has a lawsuit pending against the California Public Utilities Commission seeking full recovery of the costs through an increase in retail rates.

Company executives had warned they were expecting the company to take the write off, which on a pretax basis amounted to $6.94 billion. PG&E Chairman Robert D. Glynn Jr. said taking the charge doesn't diminish the company's conviction its utility is entitled under law to recover these costs. If the costs are deemed recoverable, he said, the utility could reestablish these assets and recognize income in the future.

Not counting the charge and other nonrecurring items, PG&E said 2000 earnings from operations were $925 million, or $2.54/share, compared to $826 million, or $2.24/share in 1999.

In the 2000 fourth quarter, PG&E Corp. reported a net loss of $4.12 billion, compared to net loss of $611 million in the comparable 1999 period. Revenue for the 2000 quarter rose 68% to $8.08 billion, up from $4.8 billion in 1999.

The company's unregulated National Energy Group (NEG) contributed a sizable percentage of gains for the year and the quarter. Earnings from operations were $162 million, or 45 cents/diluted share, on revenues of $16.6 billion for 2000, compared with $63 million, or 17 cents/share, on revenues of $11.6 billion in 1999.

PG&E also said it and the utility continue to pursue multiple avenues for managing and resolving the California energy crisis, including legal action, negotiations with regulators and elected officials, and discussions with lenders and creditors.

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